Name: Class: Date:
Test Bankth For
Cost Management 6 Edition by Don R. Hansen, Maryanne M. Mowen, Dan L. Heitger
Chapter 1-21 Answers are at the End of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. The service sector of the U.S. economy has decreased in importance as traditional industries have declined in
importance.
a. True
b. False
2. Business ethics is learning what is right or wrong in the work environment and choosing what is right.
a. True
b. False
3. Three of the major certifications available to management accountants are a Certificate in Management Accounting, a
Certificate in Public Accounting, and a Certificate in Internal Auditing.
a. True
b. False
4. Positions that have direct responsibility for basic objectives are referred to as staff positions, and those indirectly
responsible are called line positions.
a. True
b. False
5. Evaluating the performance of a segment of the company is an example of planning.
a. True
b. False
6. The cost management information system has two major subsystems: the cost accounting information system and the
operational control information system.
a. True
b. False
7. Preparing reports for division managers is an activity associated with the cost management information system.
a. True
b. False
8. One of the major advances in information technology that affects firms is the emergence of electronic commerce.
a. True
b. False
9. The role of cost and management accountants is one of support and teamwork and assistance of those who are
responsible for achieving a company's basic objectives.
a. True
Page 1
,Name: Class: Date:
b. False
10. The cost management information system is primarily concerned with producing outputs for external users.
a. True
b. False
11. The examination for obtaining the Certificate in Management Accounting consists of two parts: (1) Technology and
Analytics and (2) Strategic Financial Management.
a. True
b. False
12. The Certificate of Public Accounting does NOT include the right to serve as external auditors.
a. True
b. False
13. The treasurer of a company is responsible for all taxation activities, including dealing with the IRS.
a. True
b. False
14. JIT is a critical part of a more comprehensive approach referred to as lean manufacturing.
a. True
b. False
15. For each certification, all an applicant has to do is meet specific educational and experience requirements.
a. True
b. False
16. Changes in the way business is conducted worldwide have broadened the focus of cost management accounting
systems.
a. True
b. False
17. Divulging company information when NOT legally obligated to do so violates the confidentiality part of the IMA
code of ethics.
a. True
b. False
18. The focus of lean manufacturing is to eliminate waste, which is anything that does not add value to the end user
(customer).
a. True
b. False
19. Firms subject to the Sarbanes-Oxley Act do not have to disclose whether they have a code of ethics for senior
financial officers, nor why.
a. True
b. False
Page 2
,Name: Class: Date:
20. Enterprise resource planning (ERP) software has the objective of providing an integrated system capability and is able
to run all the operations of a company.
a. True
b. False
21. The three broad objectives of financial accounting information systems are to provide information for costing out
services and products, planning and control, and decision making.
a. True
b. False
22. An accounting information system collects, records, summarizes, analyzes, and manages data to transform inputs into
information that is provided to users.
a. True
b. False
23. The Institute of Management Accountants has established ethical standards for management accountants.
a. True
b. False
24. The controller of a company supervises all the accounting departments and is often viewed as a member of the top
management team.
a. True
b. False
25. Employee and customer loyalty are NOT a result of a strong code of ethics.
a. True
b. False
26. The process of choosing among competing alternatives is called decision making.
a. True
b. False
27. In just-in-time (JIT) manufacturing, each operation produces only what is necessary for the succeeding operations.
a. True
b. False
28. In resolving an ethical conflict, it would be appropriate to take the matter to the press where there's no legal
requirement.
a. True
b. False
29. The Certified Internal Auditor must pass a comprehensive examination designed to ensure technical competence and
have two years' work experience.
a. True
b. False
30. The two major subsystems of the accounting information system are the financial accounting information system and
the cost management accounting information system.
Page 3
, Name: Class: Date:
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
31. Which of the following are Standards of Ethical Conduct for Management Accountants?
a. perseverance and creativity
b. determination and respect for others
c. discipline, confidence, competitive, and observance
d. competence, confidentiality, integrity, resolution of ethical conflict, and credibility
32. The _____ system is an integrated system capable of providing access to real-time data from the various functional
areas of a company.
a. financial management information
b. enterprise resource planning
c. lean accounting management
d. operational control information
33. Which of the following statements is TRUE?
a. Firms that emphasize ethics outperform firms that don't emphasize ethics.
b. Those corporations that mention ethics in their management reports have lower than average performance.
c. Companies with a strong code of ethics and sense of integrity and honor will have trouble competing over the
long run.
d. All of these choices
34. In an accounting information system, which of the following is NOT a process that transforms inputs into information
that is provided to users?
a. collecting data
b. analyzing data
c. performance reporting
d. summarizing data
35. Staff positions are positions that are
a. directly involved in both financial and nonfinancial measures of efficiency of an organization.
b. supportive in nature and have only indirect responsibility for an organization's basic objectives.
c. supportive in nature and indirectly assess the overall cost impact of product designs over a product's life cycle.
d. directly responsible for carrying out the basic objectives of an organization.
36. The primary objective of the cost management information system is to provide
a. stockholders and potential investors with useful information for decision making.
b. banks and other creditors with information useful in making credit decisions.
c. management with information useful for planning and control of operations.
d. the Internal Revenue Service with information about taxable income.
37. Total quality management emphasizes
a. zero defects.
Page 4
Test Bankth For
Cost Management 6 Edition by Don R. Hansen, Maryanne M. Mowen, Dan L. Heitger
Chapter 1-21 Answers are at the End of Each Chapter
Chapter 1
Indicate whether the statement is true or false.
1. The service sector of the U.S. economy has decreased in importance as traditional industries have declined in
importance.
a. True
b. False
2. Business ethics is learning what is right or wrong in the work environment and choosing what is right.
a. True
b. False
3. Three of the major certifications available to management accountants are a Certificate in Management Accounting, a
Certificate in Public Accounting, and a Certificate in Internal Auditing.
a. True
b. False
4. Positions that have direct responsibility for basic objectives are referred to as staff positions, and those indirectly
responsible are called line positions.
a. True
b. False
5. Evaluating the performance of a segment of the company is an example of planning.
a. True
b. False
6. The cost management information system has two major subsystems: the cost accounting information system and the
operational control information system.
a. True
b. False
7. Preparing reports for division managers is an activity associated with the cost management information system.
a. True
b. False
8. One of the major advances in information technology that affects firms is the emergence of electronic commerce.
a. True
b. False
9. The role of cost and management accountants is one of support and teamwork and assistance of those who are
responsible for achieving a company's basic objectives.
a. True
Page 1
,Name: Class: Date:
b. False
10. The cost management information system is primarily concerned with producing outputs for external users.
a. True
b. False
11. The examination for obtaining the Certificate in Management Accounting consists of two parts: (1) Technology and
Analytics and (2) Strategic Financial Management.
a. True
b. False
12. The Certificate of Public Accounting does NOT include the right to serve as external auditors.
a. True
b. False
13. The treasurer of a company is responsible for all taxation activities, including dealing with the IRS.
a. True
b. False
14. JIT is a critical part of a more comprehensive approach referred to as lean manufacturing.
a. True
b. False
15. For each certification, all an applicant has to do is meet specific educational and experience requirements.
a. True
b. False
16. Changes in the way business is conducted worldwide have broadened the focus of cost management accounting
systems.
a. True
b. False
17. Divulging company information when NOT legally obligated to do so violates the confidentiality part of the IMA
code of ethics.
a. True
b. False
18. The focus of lean manufacturing is to eliminate waste, which is anything that does not add value to the end user
(customer).
a. True
b. False
19. Firms subject to the Sarbanes-Oxley Act do not have to disclose whether they have a code of ethics for senior
financial officers, nor why.
a. True
b. False
Page 2
,Name: Class: Date:
20. Enterprise resource planning (ERP) software has the objective of providing an integrated system capability and is able
to run all the operations of a company.
a. True
b. False
21. The three broad objectives of financial accounting information systems are to provide information for costing out
services and products, planning and control, and decision making.
a. True
b. False
22. An accounting information system collects, records, summarizes, analyzes, and manages data to transform inputs into
information that is provided to users.
a. True
b. False
23. The Institute of Management Accountants has established ethical standards for management accountants.
a. True
b. False
24. The controller of a company supervises all the accounting departments and is often viewed as a member of the top
management team.
a. True
b. False
25. Employee and customer loyalty are NOT a result of a strong code of ethics.
a. True
b. False
26. The process of choosing among competing alternatives is called decision making.
a. True
b. False
27. In just-in-time (JIT) manufacturing, each operation produces only what is necessary for the succeeding operations.
a. True
b. False
28. In resolving an ethical conflict, it would be appropriate to take the matter to the press where there's no legal
requirement.
a. True
b. False
29. The Certified Internal Auditor must pass a comprehensive examination designed to ensure technical competence and
have two years' work experience.
a. True
b. False
30. The two major subsystems of the accounting information system are the financial accounting information system and
the cost management accounting information system.
Page 3
, Name: Class: Date:
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
31. Which of the following are Standards of Ethical Conduct for Management Accountants?
a. perseverance and creativity
b. determination and respect for others
c. discipline, confidence, competitive, and observance
d. competence, confidentiality, integrity, resolution of ethical conflict, and credibility
32. The _____ system is an integrated system capable of providing access to real-time data from the various functional
areas of a company.
a. financial management information
b. enterprise resource planning
c. lean accounting management
d. operational control information
33. Which of the following statements is TRUE?
a. Firms that emphasize ethics outperform firms that don't emphasize ethics.
b. Those corporations that mention ethics in their management reports have lower than average performance.
c. Companies with a strong code of ethics and sense of integrity and honor will have trouble competing over the
long run.
d. All of these choices
34. In an accounting information system, which of the following is NOT a process that transforms inputs into information
that is provided to users?
a. collecting data
b. analyzing data
c. performance reporting
d. summarizing data
35. Staff positions are positions that are
a. directly involved in both financial and nonfinancial measures of efficiency of an organization.
b. supportive in nature and have only indirect responsibility for an organization's basic objectives.
c. supportive in nature and indirectly assess the overall cost impact of product designs over a product's life cycle.
d. directly responsible for carrying out the basic objectives of an organization.
36. The primary objective of the cost management information system is to provide
a. stockholders and potential investors with useful information for decision making.
b. banks and other creditors with information useful in making credit decisions.
c. management with information useful for planning and control of operations.
d. the Internal Revenue Service with information about taxable income.
37. Total quality management emphasizes
a. zero defects.
Page 4
